Foundation Trust Status

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The prospect of lower funding growth, the need to find efficiency savings - 25% over the next four years - as well as changes in regulatory requirements all present challenges to Foundation Trusts (FTs). But this new environment also provides opportunities for FTs to be innovative in the development of services using the range of freedoms available to them. We advise FT clients on all of these issues. For example:

Mergers and acquisitions

There are opportunities for FTs to partly or fully acquire smaller acute trusts that have not yet been authorised as FTs or will not be in a position to achieve FT status by the end of 2010. FTs can also look to acquire PCT provider arms as a way of taking on community service provision.
We have been and are actively involved in advising clients on mergers and acquisitions in the NHS.

Joint ventures and partnering

There may be advantages for FTs in collaborating with other providers for the delivery of services, for example PCT provider arms, GP practices, GP Commissioning consortia, local authorities, charities, social enterprises or the private sector.
There are many legal structures available for joint ventures and partnering, ranging from traditional outsourcing and Section 75 arrangements to formal corporate joint ventures. We advise clients on these structures and other issues relevant to partnering arrangements involving FTs, for example under the integrated care pilot programme and the Equitable Access Scheme.

Income generation schemes

We advise FTs on legal powers and legal structures to set up income generation schemes. For example, FTs can consider setting up ring-fenced social enterprises businesses to operate income generation schemes.
The generation of private patient income will continue to be an important issue for FTs, particularly given the Department of Health’s (DoH) recent decision to relax the private patient income cap and recognition of the right of patients to make ‘top up’ payments and the piloting of personal health budgets this year.

Dealing with Commissioners

It is vital for FTs to be familiar with the standard DoH contracts (for acute services, mental health services, ambulance services and community services, as appropriate), so as to reduce the risk of payment deductions and withholdings by Commissioners and maximise exploitation of performance related incentives.
We advise FTs on all stages of negotiation and management of the standard contracts.

Maintaining quality

Recent failures in clinical and corporate governance have highlighted the need for FTs to maintain their focus on standards of care, even as funding tightens. This will undoubtedly be reinforced by the recent establishment of the Care Quality Commission, the introduction of quality reporting in the annual report and accounts of FTs and the forthcoming statutory framework for unsustainable NHS providers.

Managing the potential liabilities of directors and governors

We advise on the scope of potential liabilities and ways to protect Directors and Governors, including through indemnity and insurance arrangements.